How self-styled charity evaluators have laid waste to productive critique of the charitable sector

publication date: Mar 15, 2017
author/source: Gail Picco

Gail PiccoI miss George Orwell.

In order to maintain a toehold on what’s right and good in the world these days, his stalwart defense of language and its equivalency to freedom bears daily review.

So, right off the bat, I want to have a word about language, a word about words, if you like, the use of adjectives in particular, starting with one used in the headline of this column—self-styled.

Self-styled as in “a title that one has given oneself.”

I choose the word deliberately to qualify the modified noun that follows it—charity evaluators. I could have used self-appointed, would-be, so-called or professed and it would have meant the same. Ultimately, they all translate into something along the lines of “who died and made you queen?”

Which brings me to the other adjective I want to talk about today, the word good, as in good intentions. Because in a discussion of self-styled charity evaluators, it won’t take long before someone gets to the point, “well, they may not tell the whole story, but they have good intentions.”

At which point, I want everyone in the world who is reading this right now to drop that adjective good. Charity evaluators have intentions. Period. Good or bad has nothing to do with it.

And their intention is to have us view charity work as they do, a view that exists primarily on the balance sheet, in terms of fundraising ratios and overhead percentages, and in their version of transparency and accountability, an oversimplified swat at a problem that, in reality, requires an endowed chair at a well-funded ivy league university.

If I were to appoint myself a charity evaluator I would, of course, have my own style and my own intentions. 

At the top of my rating criteria would be a charity’s ability to affect systemic change. As a measure of that effectiveness, I would use the amount of money spent on political activity as an indicator of their desire, if not their success, in doing so.

That’s dead easy in Canada. One point for every percentage of their budget spent on political activities up to the maximum of 10 points, reflecting the 10% the Canada Revenue Agency allows charities to spend on political activities.

Since 99.4% of charities spend no money on political activities, they would get zero right off the mark. The 500 or so left, who jointly spend about $25 million on political activities, could be sorted and rated in a spreadsheet during the time it takes to play nine innings of baseball.

It’s worth a moment or two to think about intention.

You tell me what the intent is when you call your organization, as Charity Navigator in the U.S. does, “your guide to intelligent giving.”

“Your guide to intelligent giving?” Intelligent giving? As opposed to the dumb giving the rest of us do.

There are many words I could use to describe the current work of self-styled charity evaluators, but intelligent would not be among them.

Distracted giving, yes; intelligent giving, no.

Charity Navigator is described as a “charity watchdog organization that evaluates charitable organizations in the United States.”

Their website got 9.43 million views in 2016, an increase of 11% over the previous year. They have 82.5 thousand social media followers.

A “tweak” in their rating system warranted a story in the New York Times in May 2016.

Rather uncomfortably, they say their job is “to find charities donors can trust.”

Charity Navigator casts a long shadow given its size. In 2015, it reported USD

$1,762,900 of income and rated 8,010 charities.

Of those 8010 charities, it put 26 (.32%) on its “watch list,” a sort of a yield sign for donors. If we were evaluating Charity Navigator the way we evaluate parking enforcement officers, that’s $61,392.54 a ticket.

They do other things too though. They produce top ten lists such as 10 Most Followed Charities, 10 Celebrity-Related Charities, 10 Charities Expanding in a Hurry, 10 of the Best Charities Everyone's Heard Of.

But the one thing Charity Navigator doesn’t rate is operational effectiveness.

Buzzfeed, anyone? 

But hubris is not something unique to Charity Navigator. Canada has its own version in the form of Charity Intelligence, a self-styled charity evaluator which “rates and reviews Canadian charities so donors can be informed, give intelligently and have impact.”

Although (and I know they really don’t like it when I say this), Charity Intelligence is probably best known for having had their charitable status revoked in 2012 for not filing their T3010. Their status was reinstated when they filed the proper documentation, and they went on with the business of rating charities, which they mostly do with top ten lists, star ratings of individual charities and media releases. They posted revenue of $385,310 in 2016. Right now, according to their website, they have a small board—two CFAs and a venture capitalist.

It’s not like the charity sector doesn’t have problems. It has huge problems, problems that I write extensively about in my book, Cap in Hand: How Charities are Failing the People of Canada and the World, but, as a devoted sector observer, I’m not seeing them solely on the balance sheet.  

So, while self-styled charity evaluators evaluate and force people, for lack of a better alternative, to take them seriously, the Eye of Sauron (in the form of inequity, malaise and questionable priorities among charities) is burning up the Shire.

And yet …

… instead of conducting effective operation and mission assessments, charities are jumping through hoops to meet the criteria of external self-styled rating systems.

As anyone in political communications knows, if you say nothing, you let your opposition define you. The charitable sector has been definitively painted into a corner not of its own choosing and is, for all intents and purposes, taking zero steps to get out. 

The question is: who suffers from the lack of leadership?

Gail Picco, a strategist who has worked in the nonprofit sector for 25 years, is one of Canada’s foremost experts on the increasingly complex dynamics at play in the charitable sector. She is the author of What the Enemy Thinks, a recent novel set in the nonprofit sector and of the recently published, Cap in Hand: How Charities Are Failing the People of Canada and the World published in January 2017. Gail works as a Principal with The Osborne Group in Toronto and serves as Chair of the Board of the Regent Park Film Festival.


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